evolution of the private market - motley fool
Post on 17-Oct-2014
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Slides for my talk at @themotelyfool in September 2013.TRANSCRIPT
@paulsingh #moneyball4startups
PAUL SINGH
@paulsingh・[email protected]・dashboard.io
THE EVOLUTION OF THE PRIVATE MARKET
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
@paulsingh #moneyball4startups
@paulsingh #startupchile
A (R)EVOLUTION IN THINKING
@paulsingh #moneyball4startups
EARLY STAGE STARTUPS
HAVE CHANGED
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STARTUP COSTS LOWER THAN EVER
BUT SCALING STILL COSTS MONEY
CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING
@paulsingh #moneyball4startups
WEB GETS BIGGER.WORLD GETS SMALLER.
@paulsingh #moneyball4startups
TRACTION IS THE NEW INTELLECTUAL PROPERTYPLATFORMS (SEARCH, SOCIAL & MOBILE) PRIMARILY DRIVING THE CHANGE.
NO LONGER “GOOD ENOUGH” TO DEPEND ON TECH DIFFERENTIATION.
@paulsingh #moneyball4startups
CAPITAL INCREASINGLY COMMODITIZED
RISE OF THE ANGELS, YO!
@paulsingh #moneyball4startups
NEW REALITY: MONEY FOLLOWS
FOUNDERSRISE OF THE ENTREPRENEURS, YO!
@paulsingh #moneyball4startups
SIGNALS ARE EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
@paulsingh #moneyball4startups
SIGNALS ARE EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
@paulsingh #moneyball4startups
TRANSPARENCY ISSIGNALS ARE EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
@paulsingh #moneyball4startups
WALL STREET BEAT US TO IT
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@paulsingh #moneyball4startups
UBS PROPRIETARY SATELLITE PARKING LOT FILL RATE ANALYSIS POINTS TO AN INTERESTING CADENCE INTRA-QUARTER AND POTENTIAL UPSIDE TO OUR VIEW.
“
@paulsingh #moneyball4startups
@paulsingh #moneyball4startups
TWICE A WEEK A SMALL HELICOPTER CIRCLES OVER CUSHING’S TANK FARMS ON AN OIL INDUSTRY SPYING MISSION.
“
@paulsingh #moneyball4startups
WALL STREET ISN’T ALONE
THESE TECHNIQUES ALREADY USED TO UNDERWRITE IN-VITRO FERTILIZATION LENDING, PAYDAY LOANS, SUBPRIME AUTO LENDING, HOME/PERSONAL/AUTO INSURANCE AND MORE.
@paulsingh #moneyball4startups
WE CAN DO IT, TOOSURPRISE!
IT TURNS OUT,
@paulsingh #moneyball4startups
+ “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.
@paulsingh #moneyball4startups
WE CAN DO IT, TOO.
@paulsingh #moneyball4startups
WE CAN DO IT, TOO.
@paulsingh #moneyball4startups
WE’RE DOING IT, TOO.
@paulsingh #moneyball4startups
@paulsingh #moneyball4startups
VENTURE CAPITAL IS OPEN TO ATTACK BY DISRUPTIVE NEW BUSINESS MODELS AND TECHNOLOGY.
“
-- NAVAL RAVIKANT (@naval)
@paulsingh #moneyball4startups
data.dashboard.io
@paulsingh #moneyball4startups
data.dashboard.io
@paulsingh #moneyball4startups
EARLY STAGE VCIS CHANGINGHAS CHANGED
@paulsingh #moneyball4startups
STATE OF THE ART IN EARLY STAGE INVESTING IS NOT
VERY SOPHISTICATED
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UNBUNDLING OF ADVICE, CONTROL
AND MONEY
@paulsingh #moneyball4startups
USED TO BE ABOUT CAPITAL, DEALFLOW
AND JUDGEMENTTODAY, IT’S ABOUT ACCESS.
@paulsingh #moneyball4startups
@paulsingh #moneyball4startups
data.dashboard.io
@paulsingh #moneyball4startups
(500) CHECKLISTProduct solves a problem for a specific target customer
Capital-efficient businesses - operational @ <$1M funding
Primarily internet-based distribution - search, social, mobile, local
Simple revenue models - transactions, subscriptions or affiliate
Functional prototype before investment (or previous success)
Small but measurable usage - some customers, early revenue
Small but cross-functional team - engineer, design/UX, marketing
@paulsingh #moneyball4startups
(NEW) FINANCINGS Standardized terms
No fixed amounts, no closings, no leads
Continuous, not discrete rounds
Prices beginning to float
No Board seats at the earliest stage
Herd mentality and oversubscriptions
@paulsingh #moneyball4startups
BY ITS NATURE, THE INTERNET UNDERMINES ANYONE WHOSE STATUS DEPENDS ON PRIVILEGED ACCESS TO INFORMATION.
“
-- MICHAEL LEWIS
@paulsingh #moneyball4startups
THE PRIVATE MARKET IS BECOMING MORE
ACCESSIBLE.
@paulsingh #moneyball4startups
THE PRIVATE MARKET IS BECOMING MORE TRANSPARENT.
@paulsingh #moneyball4startups
Demo Day Videos ⟹ livestream.com/500startups
Sample Pitch Decks ⟹ slideshare.net/500startups
Venture Capital 101 ⟹ venturehacks.com/archives
Investor Thoughts:
Brad Feld ⟹ feld.com
Fred Wilson ⟹ avc.com
Chris Dixon ⟹ cdixon.org
Mark Suster ⟹ bothsidesofthetable.com
angel.co/valuations and angel.co/salaries
@paulsingh #moneyball4startups
data.dashboard.io
@paulsingh #moneyball4startups
THE PRIVATE MARKET IS BECOMING MORE EFFICIENT.
@paulsingh #moneyball4startups
THE PRIVATE MARKET IS BECOMING MORE EFFICIENT.
AND, SOON, MORE LIQUID.
@paulsingh #moneyball4startups
YOUR KEY TAKEAWAYS
Focus on Traction.
Learn to Communicate and Inspire.
@paulsingh #moneyball4startups
ALSO... Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList
Raise 12-18+ months of funding
Learn the basics of VC economics
Don’t confuse due diligence with progress & probability...
Shameless plug: data.dashboard.io
@paulsingh #moneyball4startups
@paulsingh・[email protected]・dashboard.io
THE EVOLUTION OF THE PRIVATE MARKET
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)LEARN MORE:
bit.ly/dashboard-weekly